Principle Based Management™ (PBM), formerly known as Market-Based Management®, provides a holistic approach to making decisions, solving problems, and creating value for individuals in your community, team members in your organization, and society at large. In this PBM 101 series, we’re unpacking mental models, ideas, and tools that can help you reach the next level in your work.
We often hear from our Catalyst partners that it’s difficult to find effective guidelines or strategies for nonprofit management. Many of the most accessible resources integrate ideas derived from the largest top-down organizations. As a result, they underestimate or misunderstand the way that community-driven, bottom-up organizations actually operate. Other nonprofit leaders in our community have successfully collected relevant best practices from a variety of sources but are left without an overarching framework to guide and organize their daily decisions.
At Stand Together Foundation, we believe that asking the right questions and applying sound principles—instead of relying on superficial tools pulled from the latest management best seller—will always yield better results. That’s why we use Principle Based Management (PBM) as a guiding framework for all of the social entrepreneurs who participate in our flagship Catalyst Program.
PBM’s Five Dimensions can help you analyze situations, solve problems, and create value for every stakeholder and beneficiary. They keep you focused on the right priorities to produce meaningful impact in your community. And they offer foundational ideas to guide decision-making without defining what those decisions must be.
At the top of the list is the Vision Dimension, which includes tools and ideas that help you determine where and how your organization can create the most long-term value for your community.
The Vision Dimension of PBM asks you to align your work around the real objectives and opportunities facing your organization in both the short-term and the long-term:
- Are you confident that your objectives will really address the root causes of the problems you’re trying to solve?
- Based on your understanding of the current market, do you have the capabilities you need to achieve those goals?
When you apply the Vision Dimension to your work, you’ll more easily identify opportunities that leverage your team’s capabilities and expertise to generate powerful results. Your organization will also be more cohesive, because employees will understand how their daily work creates value in connection with the overall vision.
PBM encourages you to root your vision in capabilities. In a capability-driven environment, you’re empowered to make decisions based on observable strengths rather than vague aspirations. Instead of defining your organization by your sector or primary activities, try thinking in terms of what you are fundamentally good at.
Of course, what you are good at may change over time. The addition of new team members, programmatic opportunities, and shifting economic and societal forces will all impact the way you affect change. That’s why an effective vision combines an enduring purpose—what we call the North Star—with an understanding that specific capabilities will need to evolve over time to respond to an ever-changing world.
We invite you to explore the Vision Dimension in more detail and apply it to your own organization. Spend some time reflecting on the following questions as you consider what an effective vision means for your work:
- What is your North Star? What additional clarity do you need about how your team creates value so that your organization is contributing to lasting change instead of band aids that make an issue easier to endure?
- What questions can you ask that help you continually have clarity on what you and your team should prioritize?
- What are the capabilities that define how your organization makes a unique impact? If you asked employees the same question, how confident are you that they’d come up with the same list?